EMPLOYEE BENEFIT AND RETIREMENT PLANS

During the first quarter of 2017, we made the following significant changes to our employee benefit and retirement plans:

•

On December 1, 2016, the Management Committee approved the freezing of benefits under the McCormick U.K. Pension and Life Assurance Scheme (the U.K. plan). The effective date of this freeze is December 31, 2016. Although the U.K. plan has been frozen, employees who are participants in that plan retained benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plan.

•

On January 3, 2017, the Management Committee approved the freezing of benefits under the McCormick Pension Plan, the defined benefit pension plan available to U.S. employees hired on or prior to December 31, 2011. The effective date of this freeze is November 30, 2018. Although the U.S. Pension plan will be frozen, employees who are participants in that plan will retain benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plan.

•

On January 3, 2017, the Compensation Committee of our Board of Directors approved the freezing of benefits under the McCormick Supplemental Executive Retirement Plan (the “SERP”). The effective date of this freeze is January 31, 2017. Although the SERP has been frozen, executives who are participants in the SERP as of the date of the freeze, including certain named executive officers, retained benefits accumulated up to that date, based on credited service and eligible earnings, in accordance with the SERP’s terms.

As a result of these changes, we remeasured pension assets and benefit obligations as of the dates of the approvals indicated above and reduced the U.S. and U.K. plan benefit obligations by $69.9 million and $7.8 million, respectively. These remeasurements resulted in non-cash, pre-tax net actuarial gains of $77.7 million, which principally consist of curtailment gains of $76.7 million, and are included in our Consolidated Statement of Comprehensive Income for the six months ended May 31, 2017, as a component of Other comprehensive income (loss) on the line entitled Unrealized components of pension plans. Deferred taxes associated with these actuarial gains, together with other unrealized components of pension plans recognized during the six months ended May 31, 2017, are also included in that statement as a component of Other comprehensive income (loss).

The following table presents the components of our pension expense of the defined benefit plans for the three months ended May 31, 2017 and 2016 (in millions):



	United States						International
	2017			2016			2017			2016
Defined benefit plans
Service cost	$	3.4		$	5.4		$	1.3		$	1.8
Interest costs	7.7			8.3			2.5			2.9
Expected return on plan assets	(10.3		)	(10.2		)	(3.7		)	(4.2		)
Amortization of prior service costs	—			—			0.1			0.1
Amortization of net actuarial losses	1.3			3.2			1.0			1.1
Total pension expense	$	2.1		$	6.7		$	1.2		$	1.7

The following table presents the components of our pension expense of the defined benefit plans for the six months ended May 31, 2017 and 2016 (in millions):



	United States						International
	2017			2016			2017			2016
Defined benefit plans
Service cost	$	7.3		$	10.8		$	2.8		$	3.5
Interest costs	15.7			16.6			5.0			5.8
Expected return on plan assets	(20.5		)	(20.3		)	(7.4		)	(8.3		)
Amortization of prior service costs	—			—			0.6			0.2
Amortization of net actuarial losses	3.2			6.3			2.0			2.1
Total pension expense	$	5.7		$	13.4		$	3.0		$	3.3

During the six months ended May 31, 2017 and 2016, we contributed $8.5 million and $9.6 million, respectively, to our pension plans. Total contributions to our pension plans in fiscal year 2016 were $25.1 million.

The following table presents the components of our other postretirement benefits expense (in millions):



	Three months ended May 31,					Six months ended May 31,
	2017			2016		2017			2016
Other postretirement benefits
Service cost	$	0.7		$	0.6	$	1.4		$	1.4
Interest costs	0.9			1.0		1.8			1.9
Amortization of (gains)/losses	(0.1		)	0.1		(0.1		)	—
Total other postretirement expense	$	1.5		$	1.7	$	3.1		$	3.3